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Local minority, women contractors riled over being shut out of CSC construction

Friday, March 31, 2000 by

Allegations flying that CSC and contractor Hensel Phelps not following the rules

It's been said there are liars, damn liars and statisticians and at the heart of a huge complaint over minority contracting on a major construction project lies the question of how to count participation.

The Austin City Council and City Manager Jesus Garza are at odds over the number of minority and women-owned business enterprises (MWBE) that are getting contracts for the construction of the $60 million office building being built by Computer Sciences Corp. (CSC). Representatives from MWBE trade organizations told the council yesterday that CSC and its general contractor, Hensel Phelps Construction Co., were not living up to the spirit and intent of the city's MWBE contracting ordinance.

Council Member Gus Garcia distributed an analysis that indicated radically different results from what was reported by CSC on March 27. The overall goal for the project is to have 32.2 percent of the $60 million project go to MWBE firms. CSC calculated it has achieved 24.7 percent to date and intends to do more. The position of MWBE trade groups is that as of March 27, local MWBE firms had achieved only one-tenth of 1 percent participation. In specific examples of what the groups perceived to be improper:

• Standard Glass was picked for installation of windows with no opportunity for other MWBEs to provide bids. City Project Manager Michael Curtis of the Public Works and Transportation Department, said Standard Glass was not a sole source bidder because another, unsolicited bid was declined.

• Pulido & Sons Trucking was certified as an MWBE after bids were closed. Under the city's MWBE ordinance, a contractor cannot be counted toward achieving MWBE goals unless certified on the date bids were submitted.

• JJL Trucking and Desert Steel are not local firms

• CFS was certified after bids were closed and is not local.

Frank Fuentes, chair of the Hispanic Contractors Association de Tejas, said he did not disagree with allowing other MWBE firms based in Texas to be certified and counted for participation in goals for the project, but they should be certified before bidding. Fuentes said that Standard Glass was a sole source vendor who helped design the windows and the architect for the project said no others should be considered. "I'm not saying don't give them the contract, but don't count it on the participation matrix," Fuentes said. He said the overall percentage of MWBE contracting to date actually totaled 4.8 percent.

City Manager Garza said, "It's important to say that when CSC and the city negotiated this contract, what they agreed to do was make an effort, and I don't want to rewrite the contract."

Council Member Willie Lewis noted that no other companies could bid for the glass work because the manufacturer refused to give them pricing information.

"We understand your point but we agree to disagree," Garza said. "In the contract with CSC they have done nothing inappropriate. We are where we are. ( Chief of Staff) Joe Canales is working in earnest with them, and we will continue to work on getting these numbers (to meet the goals)." Garza went on to say, "On city contracts we have allowed MWBEs to get certified after the bids. I make no apology for it because minorities and women got work. If women and African Americans and Hispanics get more work we ought to be for it."

Lewis disagreed, saying said the city has a process that should be followed. "When you don't use the process, you'll be changing it for or against someone."

Fuentes noted that the intent of the action plan on the City Council's agenda for adoption was to improve local participation. "I don't disagree with the philosophy of certifying after the fact when it relates to the spirit of the ordinance," he said, "but we're doing it just for this project and (for contractors) from out of town."

A representative from the Asian Contractors Association said he had submitted profiles of certified local firms considered qualified but they were set aside in favor of out-of-town companies who were certified after the fact.

Michele Pettes, executive director of the Texas Center for Women's Business Enterprise, said, "We're not looking for special treatment but to create opportunities for MWBEs." She defended the consultants hired by the city to boost contracting by MWBE, and said they had saved the city and CSC from an explosive situation and a lot of bad publicity. She noted that the consultants were paid for by the city and not CSC. "I know for a fact that 40 company profiles were submitted and none were considered competitive," Pettes said.

Carol Hadnot, program manager for the Austin Black Contractors Association., said CSC and Hensel Phelps should be held accountable, "because every bid submitted to Hensel Phelps has been deemed noncompetitive. We haven't been able to figure out why."

Council Member Garcia said only one-tenth of 1 percent had been achieved. "We have learned regardless of how many good PR firms they hire to explain their position, it's not what we thought they would do," he said.

Council Member Lewis said some $11 million in incentives went into this project to accommodate CSC but the city will not get what it bargained for. "I suggest we take this example and use it," he said. "If we deal with Intel ( Corp.) or others we should put it in writing and not take their word."

The city manager said, "I want to apologize for getting us where we are today, but I want to emphasize the way CSC is counting these numbers is in accordance with the contract. I realize some council members would have liked to do some things differently but we didn't. I think the way they calculated these numbers is consistent with what they were told to do, and they're making efforts to bring in MWBEs."

Garcia replied, "The litmus test is folks who were supposed to receive benefits are getting what they were told. If beneficiaries of the program are not getting anything, it doesn't mean anything," he said. "Everyone was overjoyed (when the CSC deal was announced) and here we are months later and everyone's energy and joy is gone."

The item before the City Council was to adopt an action plan prepared by CSC and the city to improve MWBE participation. After more than an hour of debate, the council voted 5-0 to adopt that action plan. It sets up weekly meeting and an elaborate system of recording, tracking and responding to any issue raised concerned MWBE contracting on this project. Some insiders say the action plan will not be effective.

Paul Saldaña, executive assistant to Council Member Garcia, tells In Fact Daily, "It's a lost cause at this point. Even if the entire $5 million for tenant improvement package is awarded to MWBEs it will bring the overall percentage to only 8 percent for a $60 million project for real, legitimate MWBE participation. I'm spending at least half my time on this stuff and I have since January."

Southpark Meadows hearing delayed, neighbor gets standing to appeal

Public hearing on two appeals set for April 6

Clara Touchet is a secretary by day and by night she's a budding neighborhood activist trying to fight what she sees as an intrusion on her quality of life. She lodged an appeal of the conditional-use permit (CUP) granted by the Planning Commission to allow the House of Blues to upgrade Southpark Meadows, a musical venue at 9600 I-35 southbound, just south of Slaughter Lane.

Richard Suttle of Armbrust Brown & Davis, attorney for House of Blues, says the new owner wants to invest some $12 million to $15 million for the facility redesigned to accommodate crowds of 20,000 people, a reduction from the as many as 26,000 to 27,000 people drawn to some shows at the site in its old configuration. "This will attract top acts touring the country," Suttle told reporters.

Touchet's ability to appeal hinged on whether she had legal standing. Alice Glasco, director of Development Review and Inspection Department, said she did not. So did Assistant City Attorney Deborah Thomas. Their advice stemmed from the fact that when Touchet opposed the project in the Planning Commission's hearing March 7, she was not representing a neighborhood organization. Nor is her home at 9009 Palace Parkway within 500 feet of the proposed project. After the Planning Commission's decision, however, Touchet registered as president of the South Austin Neighborhood Organization (SANO), with boundaries that encompass Southpark Meadows. "Our finding is the neighborhood boundaries were modified after the Planning Commission's action and therefore she has no standing to appeal," Glasco told the council. Thomas said SANO wasn't registered till March 15.

Touchet said she had been meeting with neighbors since last fall, some of whom had homes within 500 feet of the project, but they had relied upon her to appeal. She said Buckingham Estates had a neighborhood organization that was dormant and she been trying since last fall to form SANO. "I find it hard to believe that the policy would bar effective input on matters affecting the community," Touchet told the council.

Suttle said he didn't think Touchet had standing. "The reason we have (the criteria for) standing in the code is if not we would have appeals on every site plan," he said. Touchet replied that she had been trying since October 1999 to organize the new neighborhood group. "I should not be penalized for the lack of knowledge about the procedure," she said. "We're citizens concerned about our neighborhood. Had we gotten the assistance we needed we would have had it (registered) sooner." A while later, Suttle, said Touchet probably didn't have standing but if there was doubt he would rather err on the side of safety and give her standing so that the permit, once issued, would not be flawed.

In the face of Touchet's calm reasoning and Mayor Kirk Watson's rereading of the Land Development Code, the mayor and council were convinced that while the legislative intent of the rules for determining standing might not have allowed Touchet standing, the poor wording of the rules did not preclude it. "It's drafted in such a way I can't imagine anyone not having an interest or standing," Watson said. The council spent about 40 minutes debating the matter before voting 6-0, with Mayor Pro Tem Jackie Goodman absent, to grant Touchet standing.

Rather than hold the posted public hearing on the Planning Commission's decision to approve a CUP with conditions, however, the council as part of the same motion voted to postpone that public hearing for a week. The reason was that although the agenda was posted to hold the council meeting at Austin-Bergstrom International Airport, an earlier press release issued by the city stated that all council meetings would be held in the facilities of the headquarters of the Lower Colorado River Authority (LCRA) and no more meetings would be held at the airport. Opponents of the Southpark Meadows project had relied upon the press release and mailed some 4,000 postcards to rally opposition to the project, telling interested parties to attend the council meeting at the LCRA. Jeff Heckler of the Solutions Group said the mailing cost of about $700 was paid for through fund-raising efforts.

Suttle had also appealed the matter on behalf of his client, and his standing was never in doubt. Suttle tells In Fact Daily that his appeal seeks to clarify some of the conditions put on the CUP by the Planning Commission. Those conditions are: the applicant must observe the agreements made with the Park Ridge Homeowners Association; may not sell alcoholic beverages after 9:30 p.m. on weekdays and 10:30 p.m. on weekends; must add a 25-foot-wide dense landscape buffer on all boundaries; must add trees and landscaping along access drives; must provide traffic control at certain intersections; must limit the number of concerts with more than 15,000 persons to 30 concerts a year or observe the Park Ridge agreement, whichever is more restrictive; and must limit noise levels to 65 decibels at the north and west property boundaries.

Touchet told In Fact Daily she has no hope of killing the House of Blues' plans for Southpark Meadows but she will ask the council to place a number of additional conditions on the project. She says she will ask that the project comply with the city's noise ordinance at the site boundaries; that wristbands be put on patrons 21 and older so that people under 21 are not sold alcoholic beverages; that the meadows used for parking vehicles be inspected monthly to ensure that sufficient vegetation is maintained to prevent flying dust; that pedestrians not be directed to any entrance not accessible via sidewalks; and dense trees and shrubs be maintained along Slaughter Lane. Suttle says the meadows used for parking will be irrigated and rotated so that dust is minimized.

"I don't think it will pay for itself in revenue to offset expenses for road-and-bridge improvements and access roads," Touchet said of the project. She said access roads will have to be widened to accommodate traffic. "If they're going to come to a party, we'd like them to be able to get home."

The total site area for Southpark Meadows is 154 acres. The CUP covers 96 acres. The limit of construction is about 48 acres, and the amphitheater improvements will be confined within 26 acres.

Joint committee finishes months- long review of septic regulations

Homeowners tell horror story of newly installed system malfunctioning

Members of the city committee on new regulations for on-site sewage facilities (OSSFs) finished their task Thursday night after listening to a couple who believe the minimum rules enforced by the Texas Natural Resource Conservation Commission (TNRCC) do not offer sufficient protection to homeowners. The committee, which began meeting in September, has listened for months to industry representatives and a group of homeowners who complained that the stricter rules proposed by the city were unnecessary and would increase septic system costs.

Many of those critics were on hand last night, but they were generally quiet. At the end of the meeting, Jim Loyd and Nina Beall, who live in the city's extraterritorial jurisdiction, on River Hills Road, told the committee they were the victims of an improperly installed septic system. "As a consumer I feel like we're left out by the regulators to whip in the wind," Loyd said.

Loyd gave the committee copies of a letter to Mayor Kirk Watson urging the city to adopt "the proposed rules that will help ensure the long-term reliable operation of the on-site sewage treatment systems."

Loyd said he and his wife hired an engineer to put in a septic system. The engineer told them they could only use one particular type of system, Loyd said, and further, that only one brand would work properly. Loyd said he felt like the engineer had a conflict of interest because the engineer apparently has an exclusive agreement to sell that particular system in this part of the state. "They tell you this is the only system that will work. Later you find out you needed a Chevrolet, not a Cadillac," Loyd said.

Loyd said he sued the septic installer in small claims court and won. During the proceeding, Loyd said, the installer testified that the engineer–not the installer–actually installed the electrical system, which was faulty. "The installer subcontracted back to the engineer to do the electrical installation," Loyd said.

"Our system backed up. The engineer came out and said, 'You've got wood chips in it.'" Loyd and Beall scoff at the idea that there were wood chips and they hired someone else to check the system. "The pump had been installed incorrectly and had shorted out. The aerators were shorted out," among other problems, Loyd said. He and his wife said they have called and written to the manufacturer many times, but have gotten little satisfaction. One big problem for the couple now is that the manufacturer's warranty requires the owner to use a maintenance company certified by the manufacturer. However, the engineer in question is the only person in the area they have found who has that certification. The manufacturer gave them the name of another maintenance company in Florence, Beall said, but that company will not return phone calls.

Beall said their system is currently working, "but it was installed without all the components and it's just a matter of time before it fails." Loyd said the couple paid between $13,000 and $14,000 for the system originally and electrical repairs cost another $1,000. Beall said the couple would file a complaint against the engineer with the State Professional Board of Engineers, which has expressed interest in their case. They declined to name the engineer.

In their letter, Beall and Loyd wrote, "Both the on-site installer and the engineer-designer should sign off in writing that the system has been installed per the plans and specifications. We've seen firsthand the finger-pointing that can happen when things are left incomplete during construction. And it's too costly to pay a designer's hourly rate to be there during every point of the installation." Beall said their system was installed while they were out of town. That was a big mistake, she said.

In addition, the couple wrote, "The city should implore…(TNRCC) to revise its rule that manufacturers must approve those who service (maintain) their aerobic treatment units, or other commonly used treatment systems. This particular provision is really making hostages of those who have purchased proprietary on-site treatment units…The public is forced to rely on the same individuals in the private sector who sell these proprietary systems…to advise them about their options when deciding what kind of system to use for their property, based on site conditions."

Water and Wastewater Commissioner Harriet Harris, a member of the OSSF committee, said, "This is a perfect example of needing more information." Fellow Water and Wastewater Commission Member Jim Haley said homeowners should be instructed in what kinds of questions to ask about the types of on-site systems that would fill their need.

Finally, Beall and Loyd endorsed a proposed rule that has made other homeowners howl–reinspection requirements for septic systems. They wrote, "Many systems, including ours, are very complex and have a variety of components that can malfunction over time, even when they are installed properly when they're first permitted. Ours is an example of a system that was inspected and permitted by the regulatory authority, but continues to have problems…Independent periodic follow-up inspections by a permitting authority might at least assist property owners by determining if indeed their system is being maintained as it should be, and in obtaining legal remedies to problems if needed."

Asked what will happen to the rules now that the committee has finished dissecting and commenting on them, Assistant City Attorney John Steiner said he would go through all the comments and change regulations "to the extent the staff accepts your recommendations."

Haley said, "There were so many disagreements, I do not view this as a consensus document."

Buzz Avery, chair of the Environmental Board, pointed out that the Watershed Protection Department (WPD) had offered 24 comments, many of which relate to conflicts between proposed rules and sections of the Land Development Code. Mary Bell Lockhart of the Health Department said she and other staff members would be meeting with WPD staff on Friday to work out differences.

The Committee voted to move administration of the regulations from the Health Department to the Water and Wastewater Department. Voting in favor of the change were Planning Commission Members Robin Cravey, Jean Mather and Betty Baker, as well as Harris. Avery abstained. Haley and the committee's chair, Mike Wilson of the Water and Wastewater Commission, voted no, and Environmental Board Member Richard Fawal was absent.

Steiner said the whole document would have to be reviewed by the entire Planning Commission, Environmental Board and Water and Wastewater Commission before it is presented to the City Council. Whatever the council approves will then be sent to TNRCC for its consideration. In the meantime, the city is enforcing TNRCC's less stringent rules.

Mayor offers reassurances about future of Mueller Airport property

Council Member Lewis to call for appointing a redevelopment authority

With rumors flying about the City Council being ready to swap land at Robert Mueller Municipal Airport (RMMA) for land in the environmentally sensitive watersheds over the Barton Springs portion of the Edwards Aquifer, Mayor Kirk Watson found himself doing some damage control at yesterday's council meeting. The rumors were based on Wednesday's story in the Austin American-Statesman. During citizens communication at yesterday's council meeting, the mayor went out of his way to explain the council's position, repeating some of what he was quoted as saying in the Statesman article. "It's an idea floated as a concept," Watson said. "We should not have fears over concepts, ideas and proposals over Mueller if we have three bedrock principles:

(1) "There is unanimity to get the master plan completed. We will hear from Roma ( Design Group Inc.) before we develop anything. If it's in the master plan it will be okay.

(2) "We need to use smart growth principles and demonstrate success. We haven't shown that Smart Growth will enhance and strengthen neighborhoods, and RMMA is a good opportunity for that.

(3) "We can use this project to enhance values for the entire area.

"If anyone said today it's a done deal, that was an error," Watson said.

The mayor wasn't the only one focusing on RMMA yesterday. Council Member Willie Lewis said in the morning portion of the council meeting that on April 6 he will ask the City Council to accept a recommendation contained in the report prepared by the original RMMA task force to appoint an entity to manage the redevelopment of RMMA.

How Austin knows what Austin needs…In an effort to boost participation in the U.S. Census, a celebration will be held noon to 8 p.m. at Plaza Saltillo Saturday, April 1. Enjoy multicultural foods from Asia, Mexico, Central and South America and the United States. There will be music and folklore, with a kids' coloring contest and a "census rap contest." Special guest Tish Hinojosa will perform as the closing act. If you haven't mailed it already, bring your census form ready to be mailed… Campaign finance lawsuit coming… Public Citizen, Citizen Action and the Gray Panthers will challenge Texas' judicial campaign finance methods next week, according to Tom "Smitty" Smith, director of Public Citizen Texas. Smith said the three groups plan to file suit in federal court on Monday, alleging that the state's campaign finance laws, as they relate to judicial elections, are unconstitutional. Smith said representatives of the three groups will give details on their suit at 10 a.m. Monday in the Speaker's Committee Room at the Capitol… Friesenhahn tract purchased…The City Council yesterday authorized $6.9 million to purchase 60 acres of land on the southwest corner of MoPac Expressway and Loop 360 from William S. Walters III, trustee. Walters gets to transfer 375,000 square feet of impervious cover credits from the tract. 160,000 SF will go to Oak Hill Technology Park. The other 215,000 SF may be used by Walters on any project he designates outside the Drinking Water Protection Zone, so long as he uses it within 15 years. Council Member Daryl Slusher lauded George Cofer, recently hired as executive director of the Hill Country Conservancy, for his efforts in this matter and thanked the Friesenhahn family for their patience.

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